Oilmarket Blog

ARA independent product stocks rise

London: Oil products held in independent storage tanks in the Amsterdam-Rotterdam-Antwerp (ARA) trading hub rose on the week today, prompted by a rise in fuel oil stocks.

Gasoil inventories were broadly stable. Demand from the European hinterland rose week on week, with falling temperatures bolstering demand for heating fuels. But the increase in barge flows to inland destinations was more than offset by an increase in seaborne volumes. Tankers arrived from the Baltic, Russia, the US and west Africa and departed for France.

Fuel oil inventories recorded by far the largest increase of the products surveyed, rising by 23.7pc week on week. The very large crude carrier (VLCC) As Suwayq is currently loading a 270,000t cargo in Rotterdam for Singapore delivery. ARA fuel oil inventories typically rise until eastbound outflows become viable. Arbitrage economics to Singapore remain workable with three more VLCC cargoes booked to load between today and 5 February. Fuel oil tankers arrived from France, Poland, Russia and the UK.

Gasoline stocks slightly fell, remaining around the nine-month high recorded a week earlier. Demand for finished grade gasoline from inland consumers rose from a low base, and outflows to the US were also higher. But ample supply in key export markets will continue to exert long-term downward pressure on demand for northwest European gasoline. Tankers left the area for the US, west Africa and Latin America and arrived from France, Italy, Sweden and the UK.

Naphtha inventories fell by 9.4pc following the departure of the Long Range 2 (LR2) tanker Aldana to Asia-pacific with an 80,000t naphtha cargo. Weaker European demand pushed the northwest European naphtha market into contango on 7 January, which is likely to support storage economics as well as additional eastbound flows. Tankers arrived from France, Norway, Portugal, Spain and the UK.

Jet fuel stocks slumped to their lowest since 10 August 2017, falling on the week. Demand from other regions has diverted cargoes away from the ARA area since the start of the year, and tankers have mostly arrived into the UK and France. Storage economics have been impacted by the jet market’s moving into backwardation on 4 January. A single 30,000t cargo arrived in the ARA area from the UK during the reporting period, but had not unloaded at the time of writing. A single tanker departed for the UK this week.